Chapter 1 What is a supply chain
Source of Revenue
Customer
Two views of supply chain
Cycle view Push/Pull View
Supply chain operation
Daily or weekly operational decisions
Sources of cost
Flows of information, products, or funds between the stages
Supply chain strategy or design
How to structure the supply chain over the next several years
ISCM
Internal Supply Chain Management
Cycle view
Processes in a supply chain are divided into series of cycles, each performed at the interfaces between two successive supply chain stages
Push/Pull View
Processes in a supply chain are divided into two categories depending on whether they are executed
Supply chain stages order
Supplier - Manufacturer - Distributor - Retailer - Customer (rev order works too)
SRM
Supplier Relationship Management
Each cycle has these 6 steps
Supplier stage markets the product, buyer stage places order, supplier stage receives order, supplier stage supplies order, buyer stage supplies order, buyer stage receives supply, buyer returns reverse flows to supplier or third party
Decision Phases of a supply chain
Supply chain strategy or design Supply chain planning Supply chain operation
Push/Pull Boundary
When the customer order arrives it switches form a push process to a pull process
Supply chain
all stages involved directly or indirectly in fulfilling a customer request like product development, marketing, operations, distribution, finance, customer service, etc. The set of all value adding activities that connect suppliers to customers Matching supply and demand
5 typical supply chain stages
customers, retailers, distributors, manufacturers, suppliers all stages may not be present in all supply chains (e.g., no retailer or distributor for Dell)
Supply chain planning
decisions over the next quarter or year
Push
execution is initiated in anticipation of customer orders (speculative)
Pull
execution is initiated in response to a customer order (reactive)
effective supply chain management
is the management of flows between and among supply chain stages
Objective of a supply chain
is to match supply to demand as effectively and efficiently as possible
Pull-based supply chain
production and distribution are demand driven sot hat they are coordinated with true customer demand rather than forecast demand -actions occur based on customer orders - a pull-based system leads to a decrease in lead-time, less inventory and reduced variability in the system
Push-based supply chain
products are pushed through the channel from the production side to the retailer -the manufacturer then bases demand forecasts on orders received (historically) from the retailer's warehouse -it takes much longer for a push-based supply chain to react to the changing market place
Cycle view
view picture on slide 14 for better understanding Customer Customer order cycle Retailer Replacement Cycle Distributor Manufacturing cycle Manufacturer Procurement cycle Supplier